Of Derogatory Items, DOLA, DOFD and Better Credit Reports
Negative Items on your Credit Report
Your credit report may only just be a piece of paper but it can have a lot of impact on many
aspects in your life. You’d have a difficult time getting a housing loan or mortgage at
competitive interest rates if your credit report is in shambles. The same goes for a car loan,
a credit card application, or even renting a house. It can even negatively impact your job
application.
Because of this, it’s important to consistently strive for better credit by avoiding the acts that
can damage your credit report and lower your credit score. By monitoring your credit report
regularly, you become aware if you have these derogatory listings and can verify if these
are indeed yours or if there was an error made.
The negative or bad information can get into your credit report when creditors or collection
agencies report such to the credit bureau. However, they can only remain in your credit
report for a limited amount of time. The older these items get, the less impact they will have
on your credit score. But in the first year that they appear, you can expect them to put a
dagger right through and bloody your credit report.

1. Public Records
2.
These include tax liens that you owe to the Internal Revenue Service. If you have paid your
tax liability, this will only remain on your credit report for seven years. If you haven’t, it will
remain on your file indefinitely. If you stop making child support payments, that will also
become part of your public record and will stay there for seven years.
2.

Judgment

When a creditor or debt collection agency decides to file a lawsuit against you for
nonpayment of your obligations and they win, the judgment can stay on your credit report
for a minimum of seven years. We say minimum because the Fair Credit Reporting Act
provides that judgments can stay in the report seven years from the date of entry or until the
statute of limitations for it has expired in your state, whichever is longer.
3.

Foreclosure and Repossession

When you cannot pay your mortgage and the bank takes the house back, this is known as
foreclosure. Repossession happens when you default on your car payments and the lender
will have to get your vehicle to sell it at an auction to somehow recoup their losses. Both will
stay in your credit report for seven years.
4.

Bankruptcy

A Chapter 7 or liquidation proceeding will stay in your credit report for ten years while a
Chapter 13 or a reorganization proceeding will remain there for seven years. Be careful
about initiating bankruptcy proceedings and not completing them because that can still
remain in your credit report for ten years even if it was not discharged.
5.

Collection Accounts

These are accounts which have been sold or assigned to debt collectors by your original
creditor after 180 days of nonpayment. This stays in your credit report for seven years but if
the statute of limitations for the debt has already expired in your state, you are no longer
held legally liable to pay for it.
6.

Inquiries

Soft inquiries will not have a negative impact on your credit score but hard inquiries—when
a copy of your credit report is requested to make a lending decision (e.g. credit card
application) is considered a negative mark. They stay in your credit report for a couple of
years.
7.

Late Payments

Once you become 30, 60, or 90 days late on your payments, the creditor will report this to
the credit bureaus. These marks will stay for seven years.
Find more articles on debt consolidation by visiting this site:
www.consolidatedebtguide.org.
Here are more interesting articles:
• Wipe Out Your Debts With Credit Card Debt Risk Management
• Who Can Help You Overcome Debt?
• Avoiding Debt Starts with Paycheck Management
• How to Increase Savings Fund While Paying Your Debts